Sports Event Contracts Violate the CEA • The “Special Rule” under the CEA, 7 U.SC. § 7a-2(c)(5)(C) includes “gaming” as a contract’s underlying that is contrary to the public interest, and the CFTC’s regulations, 17 C.F.R. § 40.11(a), categorically prohibit event contracts that involve “gaming” or “activity that is unlawful under any State or Federal law.” • In enacting the CEA’s Special Rule, Congress intended to prohibit sports betting via listing/trading event contracts: That is our intent . . . to prevent derivatives contracts that are contrary to the public interest because they exist predominantly to enable gambling through supposed ‘event contracts.’ It would be quite easy to construct an ‘event contract’ around sporting events such as the Super Bowl, the Kentucky Derby, and Masters Golf Tournament. These types of contracts would not serve any real commercial purpose. Rather, they would be used solely for gambling. Senator Lincoln Colloquy on Senate Floor, 156 Cong. Rec. S5906-5907 (2010). • In KalshiEX v. CFTC , the U.S. District Court for the District of Columbia explained that “gaming” within the CEA includes “sporting events.” 2024 WL 4164694, at *12 (D.D.C. Sept. 12, 2024).
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Kalshi Advertises Its Sports Event Contracts As Sports Betting:
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